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March 04, 2013

Downton Abbey and Economics of Large Country Estates

Not quite Doctor Whojust yet (it's not easy to compete with one of the top five grossing broadcasts in BBC's history), Downton Abbeyis, nevertheless, an undeniable international success. NBC Universal estimates that in the past three years the show has been viewed by as many as 120 million people worldwide. Despite being a somewhat traditional British period melodrama, the hit series became popular in Scandinavia, Russia, South Asia, and the Middle East. Over 8.5 million American households tuned in to their local PBS stations to watch the Season Three finale. In January, an article in the New York Times told the story of Jim Carter's cycling trip to Cambodia: while wandering among the temples of Angkor Wat, he was surrounded by a crowd of Asian tourists, excitedly calling to him, "Mr. Carson! Mr. Carson!" This is what I call making TV history!

Of course, the casting is superb. But there is no denying that, first and foremost, the show owes its popularity to the excellent storytelling skills of Julian Fellowes. The writer/creator made his characters alive with a realistic mix of "good and evil" traits in each and every one of them. He also managed to construct a multifaceted entertainment device, which reveals different aspects of the tale, depending on a particular viewer's interests. There is plenty of romance, nearly operatic dramatics, suspenseful intrigues, social tension, snappy one-liners reserved for Maggie Smith's deadpan delivery, and spellbinding details of the times when craftsmen still cared about beauty and quality, not just immediate functionality.

There is also a fundamental atmosphere of dignity surrounding the leading characters, regardless of their social origin. The audience is subconsciously attracted to the possibility of people treating each other with respect and making sacrifices. It's an escape from the reality of contemporary human behavior: Individuals of power caring about their charges? It's something no employee experiences nowadays. Servants not spitting into their patrons' dishes? Well, let's not even go there...

So, the show provides viewers with a lot of engaging material. To the point that most people don't even realize that one of Downton Abbey's most remarkable aspects is that its stories are painted on a solid factual canvas of the early 20th century. But, the geeks of history and socio-economics, who also love the show, are very anxious about the future of the Crawleys and their glorious home. They don't brush away the tidbits about possible sell-off, lost castles, shortage of funds, and estate management - they soak it all up.

Because, you see, these were not easy times for the British gentry and their large country estates. No siree! In fact, by the time we meet them in this BBC series, they've already suffered several serious economic blows.

The majority of families with hereditary titles were not industrialists, bankers, or international traders. They were (and many still are) landowners: centuries ago their royal sovereigns granted them counties and shires to rule; the fancy names came with the properties. For many generations, it wasn't befitting of any European aristocrat, not just a British one, to make income-earning efforts. The only careers acceptable for men were political or military: some of them contrived imperial plans and the others led people to death trying to fulfill them. (As you recall, Matthew Crawley's solicitor practice was considered problematic as recently as the dawn of the last century.) Of course, the only acceptable activities for women were bringing in a rich dowry (like Lady Cora did), making "society" connections, bearing the offspring, playing a hostess, hunting, and gardening.

The only source of most squires' income was that rural land they owned. Up until the last quarter of the 19th century, they played a significant part in the agricultural sector of the economy by letting out large parcels to farmers. And this was enough to keep the estates and their upstairs and downstairs occupants in good shape.

Believe it or not, the first shift for the worse was caused by a stock market crash - the 1873 collapse of the Vienna Stock Exchange (yeah, the "investors" could've learned their lessons back then, but they never do!). This is not the right occasion for going into the genesis and the consequences of the Panic of 1873. Let me just register my belief that this was the first link in the chain of economic events that led to revolutions, both World Wars, and the Great Depression. Hell, our current reality may be affected by it! However, the most relevant aftermath of the event, to this post's subject, was the Pan-European poverty which led to the contraction of market demand and agricultural depression. Most of the British Country Estates experienced severe deterioration of their income.

Unfortunately the disappearance of revenues coincided with an escalation of standards (and costs) of comfortable living. The Industrial Revolution offered possibilities for new luxiries to the estates' owners: innovative plumbing, electricity, central heating, phones, etc. It would be silly for lords and ladies to stick to the retrogressive ways of existing, in an Amish sort of way, for the sake of frugality. But can you imagine the capital investment required to outfit a stately home such as Downton Abbey with all the modern amenities? And how about those utility bills covering 100+ rooms?

As it always happens, when the national economy goes sour, the governments use taxation instruments to cover their own holes. While the Death Duty was first introduced in Great Britain in 1796, through the multitudes of loopholes, it remained a nuisance until the late 19th century. But starting with the 1890's all bequeathed property became subject to the "probate duty" with the persistently increasing taxation rates (they peaked to 65% in 1940, becoming one of the major sources of funding the UK's World War II efforts). Truth be told, economically speaking, the best thing that could happen to the Downton's inhabitants is for Lord Grantham t0 stay alive all the way to the end of the show - this will spare the audience from witnessing not just the loss of the character, but also the most significant financial blow.

Further tightening of the taxation screws came on the wings of social justice as it was interpreted by the 1909 People's Budget, conceived by two future Prime Ministers: David Lloyd George, then a Chancellor of the Exchequer, and Winston Churchill, then President of the Board of Trade. This fiscal Act was essentially a first attempt in British history to redistribute wealth. It resulted in the increase of income taxes and a mandatory revaluation of land every time it changed hands with 20% taxes imposed on the value increase. The likes of the Crawleys nicknamed the political duo behind it the "Terrible Twins."

Of course, World War I dealt a terrible blow to all Europeans, including the British landed gentry. Always a great source of life-changing drama, the war becomes the predominant backdrop of Downton's second season. In a very tactful way, while focusing on the inhuman horrors of combat with numerous lives lost and deformed, the show still managed to pinpoint the specific effect this terrible turmoil had on the economy as a whole and the estate itself. The withdrawal of working-age men from civilian life devastated both the remaining income-generating opportunities and the property's service.

So far, the series creators have been kind to the viewers who became emotionally attached to the beautiful property: they only mention a possibility of a sale. But the sad truth is that, by that time, there were only a handful of people who could buy these grand houses.

Some of them became regional museums, schools, prisons, etc. A few others opened large portions of the living quarters for public viewing. Most of the art displayed to the paying visitors in these mansions and castles doesn't belong to the titled heirs anymore. One part of the People's Budget was a provision for Acceptance in Lieu, which allowed for inheritance tax debts to be written off in exchange for donation of national treasures. While the legal ownership got transferred to such esteemed institutions as the Victoria & Albert Museum or the National Gallery, the art objects are allowed to retain their familiar positions as long as they can be viewed by the public for at least 100 days a year.

However, the rest of Great Britain's large country estates were simply demolished. Since 1900, over 1,600 important houses had been destroyed in England, Scotland, and Ireland; many of them architectural gems and the seats of historical figures. Some of the demolition spoils - fireplaces, library panelings, balustrades were sold for next to nothing; many ended up in America.

From the point of view of economic history, Julian Fellowes already wrote a sequel to Downton Abbey in his screenplay for Gosford Park (2001), based on an idea by Robert Altman, who also directed. The movie takes place in 1932 and Sir William McCordle (played by pre-Dumbledore Michael Gambon) resides comfortably in his Victorian estate, because he had cast aside gentlemanly ideals a long time ago. He is a World War I profiteer, a ruthless manufacturer exploiting the labour of women and children in his factories.

By the end of Downton's third season, the key decision-makers seem to be in agreement that Matthew's insistence on turning the estates into a big-scale industrialized agricultural enterprise is the only way to keep the place attached to the name. It remains to be seen how far Julian Fellowes will push the historical realism into the melodramatic mosaic of the show, while preserving its high ratings.

Comments

Downton Abbey and Economics of Large Country Estates

Not quite Doctor Whojust yet (it's not easy to compete with one of the top five grossing broadcasts in BBC's history), Downton Abbeyis, nevertheless, an undeniable international success. NBC Universal estimates that in the past three years the show has been viewed by as many as 120 million people worldwide. Despite being a somewhat traditional British period melodrama, the hit series became popular in Scandinavia, Russia, South Asia, and the Middle East. Over 8.5 million American households tuned in to their local PBS stations to watch the Season Three finale. In January, an article in the New York Times told the story of Jim Carter's cycling trip to Cambodia: while wandering among the temples of Angkor Wat, he was surrounded by a crowd of Asian tourists, excitedly calling to him, "Mr. Carson! Mr. Carson!" This is what I call making TV history!

Of course, the casting is superb. But there is no denying that, first and foremost, the show owes its popularity to the excellent storytelling skills of Julian Fellowes. The writer/creator made his characters alive with a realistic mix of "good and evil" traits in each and every one of them. He also managed to construct a multifaceted entertainment device, which reveals different aspects of the tale, depending on a particular viewer's interests. There is plenty of romance, nearly operatic dramatics, suspenseful intrigues, social tension, snappy one-liners reserved for Maggie Smith's deadpan delivery, and spellbinding details of the times when craftsmen still cared about beauty and quality, not just immediate functionality.

There is also a fundamental atmosphere of dignity surrounding the leading characters, regardless of their social origin. The audience is subconsciously attracted to the possibility of people treating each other with respect and making sacrifices. It's an escape from the reality of contemporary human behavior: Individuals of power caring about their charges? It's something no employee experiences nowadays. Servants not spitting into their patrons' dishes? Well, let's not even go there...

So, the show provides viewers with a lot of engaging material. To the point that most people don't even realize that one of Downton Abbey's most remarkable aspects is that its stories are painted on a solid factual canvas of the early 20th century. But, the geeks of history and socio-economics, who also love the show, are very anxious about the future of the Crawleys and their glorious home. They don't brush away the tidbits about possible sell-off, lost castles, shortage of funds, and estate management - they soak it all up.

Because, you see, these were not easy times for the British gentry and their large country estates. No siree! In fact, by the time we meet them in this BBC series, they've already suffered several serious economic blows.

The majority of families with hereditary titles were not industrialists, bankers, or international traders. They were (and many still are) landowners: centuries ago their royal sovereigns granted them counties and shires to rule; the fancy names came with the properties. For many generations, it wasn't befitting of any European aristocrat, not just a British one, to make income-earning efforts. The only careers acceptable for men were political or military: some of them contrived imperial plans and the others led people to death trying to fulfill them. (As you recall, Matthew Crawley's solicitor practice was considered problematic as recently as the dawn of the last century.) Of course, the only acceptable activities for women were bringing in a rich dowry (like Lady Cora did), making "society" connections, bearing the offspring, playing a hostess, hunting, and gardening.

The only source of most squires' income was that rural land they owned. Up until the last quarter of the 19th century, they played a significant part in the agricultural sector of the economy by letting out large parcels to farmers. And this was enough to keep the estates and their upstairs and downstairs occupants in good shape.

Believe it or not, the first shift for the worse was caused by a stock market crash - the 1873 collapse of the Vienna Stock Exchange (yeah, the "investors" could've learned their lessons back then, but they never do!). This is not the right occasion for going into the genesis and the consequences of the Panic of 1873. Let me just register my belief that this was the first link in the chain of economic events that led to revolutions, both World Wars, and the Great Depression. Hell, our current reality may be affected by it! However, the most relevant aftermath of the event, to this post's subject, was the Pan-European poverty which led to the contraction of market demand and agricultural depression. Most of the British Country Estates experienced severe deterioration of their income.

Unfortunately the disappearance of revenues coincided with an escalation of standards (and costs) of comfortable living. The Industrial Revolution offered possibilities for new luxiries to the estates' owners: innovative plumbing, electricity, central heating, phones, etc. It would be silly for lords and ladies to stick to the retrogressive ways of existing, in an Amish sort of way, for the sake of frugality. But can you imagine the capital investment required to outfit a stately home such as Downton Abbey with all the modern amenities? And how about those utility bills covering 100+ rooms?

As it always happens, when the national economy goes sour, the governments use taxation instruments to cover their own holes. While the Death Duty was first introduced in Great Britain in 1796, through the multitudes of loopholes, it remained a nuisance until the late 19th century. But starting with the 1890's all bequeathed property became subject to the "probate duty" with the persistently increasing taxation rates (they peaked to 65% in 1940, becoming one of the major sources of funding the UK's World War II efforts). Truth be told, economically speaking, the best thing that could happen to the Downton's inhabitants is for Lord Grantham t0 stay alive all the way to the end of the show - this will spare the audience from witnessing not just the loss of the character, but also the most significant financial blow.

Further tightening of the taxation screws came on the wings of social justice as it was interpreted by the 1909 People's Budget, conceived by two future Prime Ministers: David Lloyd George, then a Chancellor of the Exchequer, and Winston Churchill, then President of the Board of Trade. This fiscal Act was essentially a first attempt in British history to redistribute wealth. It resulted in the increase of income taxes and a mandatory revaluation of land every time it changed hands with 20% taxes imposed on the value increase. The likes of the Crawleys nicknamed the political duo behind it the "Terrible Twins."

Of course, World War I dealt a terrible blow to all Europeans, including the British landed gentry. Always a great source of life-changing drama, the war becomes the predominant backdrop of Downton's second season. In a very tactful way, while focusing on the inhuman horrors of combat with numerous lives lost and deformed, the show still managed to pinpoint the specific effect this terrible turmoil had on the economy as a whole and the estate itself. The withdrawal of working-age men from civilian life devastated both the remaining income-generating opportunities and the property's service.

So far, the series creators have been kind to the viewers who became emotionally attached to the beautiful property: they only mention a possibility of a sale. But the sad truth is that, by that time, there were only a handful of people who could buy these grand houses.

Some of them became regional museums, schools, prisons, etc. A few others opened large portions of the living quarters for public viewing. Most of the art displayed to the paying visitors in these mansions and castles doesn't belong to the titled heirs anymore. One part of the People's Budget was a provision for Acceptance in Lieu, which allowed for inheritance tax debts to be written off in exchange for donation of national treasures. While the legal ownership got transferred to such esteemed institutions as the Victoria & Albert Museum or the National Gallery, the art objects are allowed to retain their familiar positions as long as they can be viewed by the public for at least 100 days a year.

However, the rest of Great Britain's large country estates were simply demolished. Since 1900, over 1,600 important houses had been destroyed in England, Scotland, and Ireland; many of them architectural gems and the seats of historical figures. Some of the demolition spoils - fireplaces, library panelings, balustrades were sold for next to nothing; many ended up in America.

From the point of view of economic history, Julian Fellowes already wrote a sequel to Downton Abbey in his screenplay for Gosford Park (2001), based on an idea by Robert Altman, who also directed. The movie takes place in 1932 and Sir William McCordle (played by pre-Dumbledore Michael Gambon) resides comfortably in his Victorian estate, because he had cast aside gentlemanly ideals a long time ago. He is a World War I profiteer, a ruthless manufacturer exploiting the labour of women and children in his factories.

By the end of Downton's third season, the key decision-makers seem to be in agreement that Matthew's insistence on turning the estates into a big-scale industrialized agricultural enterprise is the only way to keep the place attached to the name. It remains to be seen how far Julian Fellowes will push the historical realism into the melodramatic mosaic of the show, while preserving its high ratings.